The thesis

Reddit is the largest repository of human-generated conversational data. AI training data licensing is on track for $400M annually by 2027. The company is expected to be profitable in 2025 with revenue growth at 61.1% YoY and 69% Q1 2026. The conviction score is 35/100, indicating a WATCHLIST status, despite an analyst consensus rating of BUY.

Why now

Reddit's data licensing deals with Google and OpenAI are ramping up, with significant revenue growth expected. The AI Buildout is driving demand for Reddit's data, with Broadcom CEO indicating AI demand could be 'significantly' higher.

What to watch

Reddit's Q1 2026 revenue growth and subsequent quarterly results will be key indicators of the company's ability to meet growth expectations. The progress of AI data licensing deals and their impact on revenue will also be crucial to watch over the next 1-3 quarters.

Key risks

Concentrated data licensing partners pose a risk, as do high valuation multiples, with P/E at 34.1x and platform moderation risks. Execution risks are also present, given the high revenue growth expectations.

Theme exposure